How to balance your checking account
To balance a checking account involves several steps. Start by making a list of all your monthly outgoing payments and a list of all your monthly incoming funds. Next, compare these figures to your monthly checking account statement for accuracy. Then, add up all the incoming funds and add those to your most recent checking account balance. Subtract from this figure the total of all your outgoing payments and withdrawals for the same period. Doing so gives you a final balance that you have in your checking account. These additions and subtractions can be made using the register in your check book.
Read on to learn more about how to balance a checking account.
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs.
Get Started on Your Checking Account Today!
What is a checking account?
A checking account is often referred to as a liquid account, where customers can make frequent deposits and withdrawals to pay off everyday expenses and carry out financial transactions, making them far more flexible than a typical savings account.
The
benefits and advantages of having a checking account include the ability to easily manage your money and pay bills through automatic payment, set up automatic transfers to other financial accounts, and getting paid faster through direct deposit of paychecks and IRS tax refunds.
What does it mean to balance a checking account?
Checking accounts are best managed when the outgoing and incoming funds are accounted for, balanced, and verified for accuracy. This means that you've verified there are no unexplained charges or payments leaving your account, and that you know where the money coming in is coming from. When the additions and subtractions are accounted for, you’ll know exactly how much money you have as an account balance.
Why you should balance your checking account
Keeping your checking account balanced helps people create financial stability and understand their financial position. Here are some of the main reasons why you should balance your checking account:
Catch fraudulent activity. Keeping track of your incoming and outgoing monies helps identify any unauthorized activity on your account.
Identify mistakes. There are times when, despite everyone's best efforts, merchants, banks, and other parties make errors in their own accounting which can lead to an error in how much you've been charged, for example. Identifying mistakes can save you money.
Avoid bounced checks. Knowing how much you have in your account means you can write checks and spend with confidence, knowing you have enough money in your account to cover your expenses. Banks and credit unions charge fees for bounced checks.
Avoid overdraft fees. An overdraft occurs when you don’t have enough money in your checking account to cover your withdrawal transactions. Banks and credit unions charge fees when an account goes into overdraft.
Monitor your budget. It's easier to keep on track with monthly budgeting when you've accounted for your income and expenses and know how much money you have in your account.
Track bank fees. Banks may charge account maintenance fees and other fees, which you may not be aware of. Keeping an eye on your account will help you spot fees and unexplained charges.
Track automatic payments. Most people these days have set up automatic payments of utility bills, credit cards, mortgage payments, car loans, and other monthly debts. Balancing your checking account helps keep track of where your money is going and how much you're paying.
How to quickly balance your checking account
While personal accounting may seem tedious, it's quite simple if you are timely and consistent with your record keeping. Here are some tips to make balancing your checking account quick and easy.
Record all your transactions. Save your receipts from all purchases and payments made using checks or your debit card. If you have any bills paid directly from your checking account, such as utilities or phone bills, be sure to record those as well. Recording all transactions going into your account or being withdrawn is the foundation for efficient record keeping.
Check your account balance. Check your balance at least weekly, to ensure you have enough money in your account to cover your expenses and withdrawals.
Compare check register to account statement. Your check register is where you record your incoming and outgoing funds. Comparing your check register to your monthly account statement will make it obvious if you've missed a transaction or if there's activity on your account that you didn't transact.
Identify outstanding transactions. Be sure to look for inconsistencies between your receipts and known transactions and your account statement. should be brought to the attention of your credit union or bank. They may be able to provide additional details that will remind you of a transaction you made but didn’t record. Or you may find account fraud and steps can be taken to remedy the situation.
Run the numbers. If your account statement appears correct, but your checkbook or personal accounting doesn't add up, run the numbers again until you are able to locate the discrepancy.
Fix mistakes. The sooner you identify errors the sooner they can be corrected by your financial institution or the merchant that made the error.
What is the best time to balance your checking account?
Some people wait for their monthly checking account statement to reconcile or compare the earnings and expenses. However, it's typically more efficient to balance your checking account on a daily or weekly basis, to keep track of transactions and prevent receipts and paperwork from piling up. How to balance your checking account is entirely up to you and you may find that one timeframe works better than another.
What do I do if there are fraudulent charges on my checking account?
Contact your credit union or bank immediately. All financial institutions have fraud prevention policies and strategies to assist their customers in the event an account is hacked, or personal information is lost or stolen.
How much should I keep in my checking account?
You should always keep enough money in your account to fully cover your monthly expenses that will be withdrawn. It's also a good idea to keep some extra money in your checking account in case of an emergency. If you do not keep sufficient funds in your account, you could end up with an
overdraft which occurs when you don’t have enough money in your checking account to cover your withdrawal transactions. Credit unions and banks typically charge a fee on accounts that go into overdraft, so you may want to get
overdraft protection.
How many checking accounts can I have?
There is no limit to the number of checking accounts you can have. Some people find it sufficient to have one or two accounts, such as a checking and savings account, while other people may have four or more accounts, including business accounts.
How do I open a checking account?
Opening a checking account online is fast, easy, and safe.
Online checking accounts are available with credit unions, banks, and other financial institutions. While you can open an account in-person, today’s technology makes it safe and easy for anyone interested in opening a checking account online.
How do checking accounts compare to savings accounts?
A
checking account is a type of financial account that lets people make deposits and withdrawals as needed. This includes using
ATMs, depositing checks and cash, writing checks, and more. Checking accounts are particularly designed for making quick payments. Savings accounts were created to help people keep separate the money they use to pay bills separate from the money they save. There are
different types of savings accounts, many of which pay interest, which helps people grow their money and save for retirement.
Are checking accounts worth it?
Yes, checking accounts are worth it because they are an essential part of financial transactions that people need as part of their financial portfolio. Personal checking and business checking accounts let you seamlessly receive income and pay bills using a debit card or checks.
Why Savvy Consumers Choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including HELOCs, car loans, personal loans, mortgages, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation consultation with one of our HELOC experts.
Get Started on Your Checking Account Today!